The number of promising crypto projects is dwindling, with capital increasingly focused on blockchain solutions for traditional finance, according to analysts at NYDIG.
Investor Priorities and the Decline of Web3
Greg Cipolaro, head of research at the company, highlighted areas that still hold potential:
- Bitcoin and stablecoins;
- tokenized assets;
- part of the DeFi infrastructure;
- base networks (L1) like Ethereum.
Investors have noticeably cooled towards crypto games, metaverses, and decentralized social networks, finding that centralized alternatives operate faster, cheaper, and more efficiently.
According to Cipolaro, the properties of open networks are ideally suited for monetary transactions. Most everyday applications do not require a global immutable ledger. The concept of Web3 in its broad sense is gradually becoming a thing of the past.
Market behavior supports this thesis: Bitcoin’s dominance has risen to record levels. In previous cycles, capital typically flowed into altcoins at the peak of growth, but this has not occurred in the current phase.
Moving Away from Cypherpunk Ideology
The trend towards merging with the traditional economy raises concerns among some in the community. Evgeny Gaevoy, founder of the market maker Wintermute, believes the industry has traded its roots for a pursuit of price growth.
He argues that full integration with Wall Street contradicts the original goals of cryptocurrencies. Stablecoins, for instance, do not create an independent system but rather reinforce the dominance of the US dollar. The Wintermute founder insists the industry needs to return to its original ideology.
Gaevoy also highlighted the gap between financial metrics and real utility: despite the Ethereum ecosystem’s TVL exceeding $120 billion, the actual and widespread use of decentralized applications remains “extremely limited.”
“Outdated Indicator” of the Coinbase Premium
Cipolaro argues that the price difference of Bitcoin on Coinbase (in dollars) and Binance (in USDT) sends false signals. This indicator reflects fluctuations in the stablecoin’s exchange rate to the dollar, rather than real investor demand for cryptocurrency.
Adjusted data presents a different picture. Offshore investors are not merely selling Bitcoin for stablecoins—they are divesting from Tether and withdrawing capital from the industry entirely. This explains the reduction in USDT supply since the beginning of the year.
Crisis in Corporate Crypto Strategies
DAT companies, initially created as a simple tool for investors to buy cryptocurrency, are changing strategies.
These companies now conceal the volumes of issued shares and purchase non-core assets—from securities to aircraft engine leasing contracts. Essentially, they are transforming into actively managed funds without professional teams.
An NYDIG analyst believes these companies need to decide: return to transparent Bitcoin accumulation or become open investment funds with strict reporting.
According to a JPMorgan survey, major family offices worldwide have bet on artificial intelligence, leaving cryptocurrencies overlooked.